The Fifth Circuit Court of Appeals has broadened the scope of employment actions that may become grounds for an employment discrimination lawsuit and reversed its longstanding precedent that previously required plaintiffs to show they experienced a discriminatory ultimate employment decision, such as being hired, granted leave, discharged, promoted, or compensation issues. On August 18, 2023, the Fifth Circuit issued an en banc decision in the Felesia Hamilton, et al. v. Dallas County case and adopted a new threshold for discrimination lawsuits. The Fifth Circuit will now allow plaintiffs to sue if they claim that discrimination affected the “terms, conditions, and privileges” of their employment. This is a lower threshold than the prior “ultimate employment decision” standard.

The Fifth Circuit noted that “de minimis workplace trifles” are still insufficient to establish a discrimination claim. The Court, however, declined to give lower courts and employers more guidance on the threshold that will now apply in discrimination lawsuits and suggested the standard will be fine-tuned in future decisions. As is, the Fifth Circuit’s decision may lead to an increased number of employment discrimination lawsuits and make it more difficult for employers to obtain dismissal of claims at early stages of litigation.

The history of the Fifth Circuit’s discrimination claim standard and the Hamilton litigation

Federal law under Title VII prohibits employers from failing or refusing to hire or discharging an individual or otherwise engaging in discrimination against an individual “with to his compensation, terms, conditions, or privileges of employment” on the basis of race, color, religion, sex, or national origin. Historically, the Fifth Circuit—unlike other federal circuit courts—has limited liability for employment discrimination to circumstances involving “ultimate employment decisions,” including those related to hiring, granting leave, discharges, promotions, or compensation. Texas state courts adopted the same standard to claims under Texas’s Commission on Human Rights Act (“CHRA”), the state anti-discrimination law equivalent to Title VII, because those two statutes are interpreted in a parallel manner. Therefore, a plaintiff who did not experience an “ultimate” adverse employment action could not pursue a discrimination claim in Texas federal or state courts.

The facts of the Hamilton case persuaded the Fifth Circuit to reconsider and, in the end, drop the “ultimate employment decision” requirement for discrimination cases. The plaintiffs were female correctional officers who worked for the Dallas County Sheriff’s Department and faced a workplace scheduling rule that made a clear distinction on the basis of employees’ sex. Under the county jail’s prior policy, officers could pick shift schedules based on seniority. Then, the policy changed, such that only male correctional officers could take both Saturday and Sunday off in a given week. Female employees could take days off on weekdays and on one of the two weekend days but could never take off for the whole weekend. This sex-based policy was apparently based on a supervisor’s belief that “it would be unsafe for all the men to be off during the week and that it was safer for the men to be off on the weekends.” The county jail adopted this rationale for the scheduling policy even though male and female officers performed the same tasks on the job, and the jail’s population was the same on weekdays and weekends.

When the female correctional officers sued and claimed that their employer discriminated against them in scheduling on the basis of sex, the trial court applied the Fifth Circuit’s threshold for discrimination claims and dismissed the case for failure to state a plausible claim for relief. The trial court concluded that changes in an employee’s work schedule are not an ultimate employment decision. On appeal, a Fifth Circuit panel agreed but then urged the en banc Fifth Circuit to reexamine the ultimate employment decision requirement.

The Fifth Circuit’s new standard and its application in the Hamilton case

Now, the entire membership of the Fifth Circuit has taken the invitation to reexamine its standard. The new en banc decision in Hamilton abandons the Court’s traditional threshold for employment discrimination suits. Instead, the Fifth Circuit held that to state a discrimination claim, a plaintiff must only allege facts plausibly showing discrimination in hiring, firing, compensation, or in the terms, conditions, or privileges of his or her employment. The Court viewed this standard as more faithful to the plain language of Title VII, which does not contain an “ultimate decision” requirement. The Court also recognized that its prior requirement was unique in the entire country and led to some results that the Court called “remarkable” and now clearly wishes to erase off the books. For example, the Court pointed to a 2019 decision where a plaintiff alleged that he and his Black colleagues had to work outside with no access to water, while white employees worked inside with air conditioning. Despite that race-based difference in working conditions, the plaintiff’s Title VII claim failed because he could not show he had experienced a discriminatory ultimate employment decision.

Applying the new, more lenient Title VII standard to the female correctional officers’ claim, the Fifth Circuit had “little difficulty” ruling that they plausibly alleged discrimination with regard to the terms, conditions, or privileges of their employment at the jail. The Court rejected Dallas County’s arguments that Title VII plaintiffs should be required to show economic harm—such as reduction in pay—as a prerequisite for a discrimination claim.  Instead, the Court described an employee’s work schedule as one of the “quintessential ‘terms or conditions’” of one’s employment that goes “to the very heart of the work-for-pay arrangement.” The Court also called the county jail’s former, abandoned policy that gave employees the right to pick schedules based on seniority a ”privilege” of employment. The Fifth Circuit held that the change from a seniority-based scheduling system to a sex-based one plausibly denied female officers the privilege of seniority on the basis of sex. The officers’ claim can now proceed to the discovery stage in the trial court.

The Hamilton decision leaves much to be decided in the future

While the Fifth Circuit determined that the female correctional officers’ case against the county could proceed under the Court’s new standard, the Court gave limited guidance on the broader implications of its ruling and what other workplace incidents or decisions may now serve as the basis of a discrimination claim. At most, the Court acknowledged that Title VII is not “a general civility code” for workplaces. And it held that there is no liability under Title VII for “de minimis workplace trifles.”

The Court, however, did not define what is “de minimis” and what is actionable. For example, the Court declined—at least for now—to join several other federal circuit courts by requiring employees to show that they experienced a “materially” adverse change to the terms, conditions, or privileges of employment. Rather, the judges decided to leave the question of “the floor” for Title VII’s anti-discrimination provision for future cases.

In a concurring opinion, three Fifth Circuit judges called the en banc majority’s decision “incomplete.” They analogized that the majority decided that speeding is illegal, but did not say what speed is illegal. The concurring judges also noted that in its next term, which begins in October 2023, the United States Supreme Court will hear a case out of the Eighth Circuit that may clarify the scope of Title VII’s protections. In the Muldrow v. City of St. Louis case on the Supreme Court’s docket, an employee was transferred between divisions of a police department but did not experience a change in title, salary, benefits, working conditions, or responsibilities. The employee, however, preferred her original division assignment and sued for gender discrimination. In deciding whether that employee has a Title VII claim, the Supreme Court may comment on what kind of workplace injury is sufficient to support a Title VII claim.

Hamilton’s implications and lessons

As the Fifth Circuit openly acknowledges, the true scope of the new standard for employment discrimination claims in Texas federal and state courts (which are likely to follow suit and apply Hamilton to state-law CHRA claims) is not yet clear. Upcoming Fifth Circuit decisions and, perhaps, the Supreme Court’s ruling in Muldrow will likely illuminate what types of workplace events and decisions may support an employment discrimination claim.

For example, the three concurring justices posed a hypothetical that may arise in many workplaces in 2023, including at school districts and colleges. What if the employer allows a certain supervisor to work remotely from out-of-state because that employee’s spouse relocates, and the employer wishes to retain the supervisor despite his or her need to move and inability to work in-person? The concurring opinion asks: “If that supervisor is male, or white, or Christian, does this mean that any female, Black, or Muslim supervisor” has a discrimination claim if they are denied the same remote work arrangement? It is to be determined whether remote work options or other workplace decisions that are more than “de minimis” but short of “ultimate” employment actions will open the courthouse door under the Fifth Circuit’s new standard.

Some things we can, however, anticipate now. With the abandonment of the “ultimate employment decision” requirement, more employment discrimination claims in Texas will make it past the early dismissal stage to discovery. Employers may also see an increase in the overall number of employment discrimination lawsuits, as employees and plaintiffs’ attorneys learn that claims based on working conditions are more likely to be viable.

School districts should check their Board policies under the DIA policy series to see if they limit the scope of employee discrimination protections to “ultimate employment decisions” and whether any updates are necessary on account of Hamilton. Notably, TASB’s existing legally-referenced DIA policy already does not include an ultimate decision threshold and, instead, echoes Title VII’s plain language: that it is an unlawful for a district to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment based on a protected characteristic. Moreover, school districts should consider updating online information regarding statements of nondiscrimination, employee handbooks, and other resources for employees regarding prohibited discrimination to reflect the Fifth Circuit’s decision to drop the “ultimate employment decision” requirement. Districts should also make certain that officials who have equal employment opportunity-related responsibilities are notified of and trained on the new standard for discrimination lawsuits. Staff who respond to and investigate internal DIA (Local) complaints should follow the new standard and reflect it in their investigations and recommendations. The new standard should also be included in anti-discrimination training provided to district staff.

Our blog will continue to monitor the Muldrow case and Fifth Circuit and lower court decisions applying Hamilton. In the meantime, if you have any questions about Hamilton’s impact, federal or state law discrimination claims, or other employment issues, please contact Oleg Nudelman at onudelman@thompsonhorton.com or any member of Thompson & Horton’s litigation team.